Four months ago, LeEco CEO Jia Yueting acknowledged that the company was running out of cash. Now it looks like the company is having some hard time continuing it’s business in India. As per sources, the company might soon stop serving South Asian nation.
According to a report by Economic Times, the company has fired 85% of its India staff and two senior executives — Chief Operating Officer (Smart Electronics Business) Atul Jain and Chief Operating Officer (Internet applications, services and content) Debashish Ghosh have resigned from the company.
LeEco, the Chinese internet and smartphone company entered Indian markets in 2016 & started offering premium specifications for a cheap price. The company placed a huge bet on marketing with advertising budget as high as ₹80 crore ($12m) a month, had exited sales through offline retail stores in December.
In November 2016, Jia Yueting, emailed all his employees saying “the firm had burnt cash too quickly as it expanded into businesses ranging from smartphones to driverless cars.” While Jobs have been shed at both the Mumbai and Delhi offices that currently have skeletal staff, the company is now firing people at the research and development centres in Bengaluru.
The company might be planning to shutdown in India and continue to focus on China & US markets. Alex Li, Chief Operating Officer of LeEco India has confirmed the exit of the two executives to ET but has denied any plans to exit the market or liquidate stock. He’s called the layoff as ‘recalibration and reimagining of the business in India’.
However, a senior executive of a leading ecommerce marketplace said “LeEco is preparing to exit India as it has been struggling to find a winning formula, with demonetisation further hurting sales.”
“Xiaomi is strong online and Oppo-Vivo offline. So, LeEco found it neither here nor there,” he added. Another senior industry executive said LeEco was currently liquidating stock and will exit in the next few months. He said the flagship models will not be launched in India.